A Federal Excise Tax (FET) on Tobacco and Nicotine Products Threatens Our Small Businesses

On April 22, 2021, Senators Dick Durbin (D-IL) and Representative Raja Krishnamoorthi (D-IL) introduced the Tobacco Tax Equity Act of 2021. Since then, legislators have contemplated including this language into the upcoming $3.5 trillion budget reconciliation package. This proposal would increase the federal tax rate on cigarettes, index it to inflation, and set the federal tax rate for all other tobacco products at the same level.

Furthermore, it would establish the first federal tax on e-cigarettes/vape products, which would be equivalent to the tax on tobacco. Beyond being an ineffective policy measure, we believe that this legislation would be harmful to our industry participants.

FET Will Harm Our Small Businesses

  • Tobacco products constitute nearly 35% of in-store sales for convenience stores, and 90% of all tobacco is sold in convenience stores that have been deemed essential.
  • Taxing these products will limit sales of tobacco products and other goods, putting some retailers out of business and Americans out of work.
  • We’re already seeing this disastrous policy play out on the state level, such as in Ohio and Minnesota, where jobs and small businesses are paying the price.

Tell Congress – no new taxes on tobacco and nicotine products!

To stop this misguided policy proposal and save our essential businesses, we need your help. Reach out to your Representatives and Senators to let them know the harmful consequences that this legislation poses on our communities and our local economy.

In the midst of this global pandemic, we deserve better than to have Washington legislators create hurdle after hurdle for our businesses to overcome. Together, we can hold our elected representatives accountable and protect our local convenience stores.